The Medicare and Medicaid Electronic Health Record Incentive Programs: Changes to Meaningful Use and How to Collect on the Incentives
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1 Health Care ADVISORY July 29, 2010 The Medicare and Medicaid Electronic Health Record Incentive Programs: Changes to Meaningful Use and How to Collect on the Incentives Yesterday, the final regulations that set forth the long-awaited framework for the adoption of electronic health record (EHR) systems by eligible professionals (EPs) 1 and eligible hospitals 2 were published in the Federal Register. The Centers for Medicare & Medicaid Services (CMS) issued the Final Rule (the Meaningful Use Final Rule ) 3 that sets forth the requirements for EPs and eligible hospitals to be considered meaningful users of EHRs and, thereby, qualify for EHR incentive payments. The Office of the National Coordinator (ONC) also issued a Final Rule (the Certification Criteria Final Rule ) 4 that sets forth the final initial standards, implementation specifications and certification criteria for EHRs. Both rules were originally released on July 13, The Health Information Technology for Economic and Clinical Health (HITECH) Act, which was passed as part of the American Recovery and Reinvestment Act (ARRA), created financial incentives within the Medicare and Medicaid programs to encourage the use of EHRs. The Meaningful Use Final Rule specifies the requirements for meaningful use, the calculation for incentive payments and penalties, and other requirements for the Medicare and Medicaid Incentive Programs that were finalized by CMS. Meaningful users of EHRs will be eligible for incentive payments beginning in 2011 as mandated by the HITECH Act. Beginning in 2015, EPs and eligible hospitals that do not meet the meaningful use criteria will be penalized with reductions to their Medicare payments. There are no penalties under the Medicaid Incentive Program. The initial set of standards, implementation specifications and certification criteria adopted by ONC will support the achievement of Stage 1 meaningful use, as outlined in CMS Meaningful Use Final Rule For purposes of the Medicare Incentive Program, an EP is a non-hospital based physician (i.e., doctors of medicine or osteopathy, doctors of dental surgery or dental medicine, doctors of podiatric medicine, doctors of optometry and chiropractors). For purposes of the Medicaid Incentive Program, an EP is a non-hospital based physician, nurse practitioner, nurse midwife, dentist or a physician assistant (practicing in a federally qualified health center or rural health clinic that is led by a physician assistant) with at least a 30 percent Medicaid volume or a 30 percent volume attributable to needy individuals, if practicing predominantly in a federally qualified health center or rural health clinic. Non-hospital based pediatricians with at least a 20 percent Medicaid volume would also be eligible for Medicaid incentive payments although different payment rules are applicable. For purposes of the Medicare Incentive Program, the HITECH Act defines eligible hospitals as subsection (d) hospitals, critical access hospitals and Medicare Advantage-affiliated hospitals. Therefore, rehabilitation hospitals, long-term care hospitals, cancer hospitals, psychiatric hospitals and children s hospitals are not eligible for incentives under the Medicare Incentive Program. For purposes of the Medicaid Incentive Program, the HITECH Act defines eligible hospitals as children s hospitals, acute care hospitals with at least a 10 percent Medicaid volume and critical access hospitals (as added by the Final Rule) with at least a 10 percent Medicaid volume. 75 Fed. Reg (July 28, 2010). 75 Fed. Reg (July 28, 2010). This advisory is published by Alston & Bird LLP to provide a summary of significant developments to our clients and friends. It is intended to be informational and does not constitute legal advice regarding any specific situation. This material may also be considered attorney advertising under court rules of certain jurisdictions.
2 This advisory summarizes key sections of both the Meaningful Use Final Rule and the Certification Criteria Final Rule, with a specific focus on the significant changes made by CMS and ONC, respectively, in the Final Rules. 5 MEANINGFUL USE FINAL RULE Meaningful Use: Overview The HITECH Act requires that meaningful users, at the very least, (1) demonstrate use of certified EHR technology in a meaningful manner; (2) demonstrate to the satisfaction of the Secretary that certified EHR technology is connected in a manner that provides for the electronic exchange of health information to improve the quality of health care, such as promoting care coordination, in accordance with all laws and standards applicable to the exchange of information; and (3) submit to the Secretary, in a form and manner specified by the Secretary, information on clinical quality measures and other measures specified by the Secretary. Objectives and Measures for Proving Meaningful Use In the Meaningful Use Proposed Rule, CMS set forth 23 objectives for hospitals and 25 for EPs. CMS proposed that hospitals and EPs must meet all of the measures associated with these objectives in order to qualify as meaningful users for purposes of the incentive payments. However, in response to almost unanimous public comment that the objectives and measures were too ambitious given the short timeline available for certification and adoption of EHR technology and the current levels of EHR technology adoption, CMS determines in the Meaningful Use Final Rule that it will split the objectives into a core set and a menu set. Under the core set, EPs must meet 15 measures and hospitals must meet 14 measures (the e-prescribing objective does not apply to hospitals). Under the menu set, hospitals and EPs must select and implement five of the 10 measures. All EPs and hospitals must choose at least one of the population and public health measures from the menu set. 5 The CMS Meaningful Use Proposed Rule (75 Fed. Reg. 1844) and ONC Certification Criteria Interim Final Rule (75 Fed. Reg. 2014) were published in the Federal Register on January 13,
3 The core set of objectives and measures are summarized in the following chart: -3-
4 -4-
5 -5-
6 The menu set of objectives and measures are summarized in the following chart: -6-
7 -7-
8 Many of the measurement levels for the specific objectives were reduced in the Meaningful Use Final Rule. For instance, the Meaningful Use Proposed Rule would have required EPs to generate and transmit more than 75 percent of all permissible prescriptions electronically. However, the Meaningful Use Final Rule only requires that more than 40 percent of prescriptions are electronically prescribed. CMS also made other changes to the measurement levels, such as reducing the required clinical decision support rules from five to one. Removal of the Administrative Transaction Objectives In the Meaningful Use Proposed Rule, CMS proposed to require EPs and hospitals to submit at least 80 percent of all claims filed electronically to public and private payers. While CMS reaffirms its broad discretion to require the use of certified EHR technology in a manner that enhances efficiency, the agency states a number of reasons for removing this measure from the final definition in the Meaningful Use Final Rule. CMS notes that the option for certification of EHR modules will allow practice management systems or clearinghouses to provide administrative transaction functions as components of certified EHR technologies. -8-
9 However, at the same time, CMS recognizes there is disagreement over which systems constitute an EHR, and many entities view these billing systems as separate from their EHR systems. In addition, CMS expresses concern that practice management system vendors may not be prepared to seek certification for their products in 2010 and Additionally, the introduction of X standards in January 2012 would add complexities to the certification process for Stage 1. Finally, CMS notes its inability to impose additional standards beyond what is required by the Health Insurance Portability and Accountability Act (HIPAA) on third-party payers or clearinghouses. CMS does express its intent to require electronic submission of claims as a part of Stage 2, noting that the introduction of the X standards and the transition to International Classification of Diseases-10 (ICD- 10) in 2013 provides an opportunity for incorporating these transactions in light of the fact that most providers will have to upgrade or implement new practice management systems. CMS also determines to remove the measure requiring EPs and hospitals to electronically check the insurance eligibility for at least 80 percent of all unique patients. Citing a similar rationale for removal of this measure as the electronic claims submission measure, CMS does state its intent to include electronic insurance eligibility checks as an objective in Stage 2. Addition of Objectives Recommended by the HIT Policy Committee In the Meaningful Use Final Rule, CMS incorporates two objectives into the menu set based on recommendations from the HIT Policy Committee. The first objective relates to the recording of advance directives for patients 65 or older by hospitals and critical access hospitals. The second objective relates to the use of certified EHR technology to identify patient-specific education resources and provide them to patients. Clinical Quality Reporting: EPs In the Meaningful Use Proposed Rule, CMS proposed to require each EP to submit information on a core measure group and a subset of clinical measures appropriate to the EP s specialty. In total, CMS proposed 90 clinical quality measures for EPs. However, in the Meaningful Use Final Rule, CMS finalizes only those clinical quality measures for which clearly defined electronic specifications have been finalized by the date of display of [the] final rule. Therefore, only those measures that can be calculated by EHR systems will be required. 6 In the Meaningful Use Final Rule, CMS finalizes 44 of the 90 originally proposed measures. Three of the 44 measures are considered core measures for which all EPs must report. If one or more of the core measures is not applicable to the particular EP (i.e., if the measure is reported with a value of zero in the denominator), then the EP will be required to report on one or more of three alternate core measures in lieu of the core measures that are not applicable to the EP. If all six core and alternate core measures are inapplicable, an EP may report zeros for all six denominators. In addition to the three core measures (and alternate core measures as the case may be), EPs will also have to select and report on three additional measures from the remaining measures on the list (i.e., those that are not considered core or alternate core measures). If these three selected measures have a value of zero in the denominator, then the EP will have to attest that all of the other clinical quality measures, if calculated by the certified EHR technology, would also 6 Although the clinical quality measures are limited to those for which electronic specifications have been finalized, EPs, hospitals and critical access hospitals will still need to attest to the results of the calculations by their EHR systems. -9-
10 have a value of zero in order to be exempt from reporting on additional measures. This process for clinical quality reporting finalized by CMS in the Meaningful Use Final Rule obviates the need for the specialty subsets of clinical quality measures originally included in the Meaningful Use Proposed Rule. In the Meaningful Use Final Rule, CMS notes that the clinical quality measure requirements are simply a reporting requirement and do not require a particular performance standard. Clinical Quality Reporting: Hospitals For hospitals and critical access hospitals, CMS states that it will require reporting on 15 clinical quality measures. Electronic specifications have been finalized for all of these measures. CMS acknowledges that some of these measures may not be applicable to certain hospitals, such as children s hospitals. However, just as with the reporting requirements for EPs, hospitals to which certain measures do not apply will need only to report the measure with a zero in the denominator. Definition of Hospital-Based Physician The HITECH Act specifies that hospital-based EPs are not eligible for Medicare or Medicaid incentive payments. 7 CMS notes in the Meaningful Use Final Rule that this term was originally defined under the HITECH Act to mean an EP, such as a pathologist, anesthesiologist or emergency physician, who furnishes substantially all of his or her Medicare-covered professional services during the relevant EHR reporting period in a hospital setting (whether inpatient or outpatient) through the use of the facilities and equipment of the hospital, including the hospital s qualified EHRs. However, the Continuing Extension Act of 2010 (Pub. L. No ), which was signed into law by President Obama on April 15, 2010, amended the definition by redefining a hospital setting as either an inpatient or emergency room setting. Thus, the definition of a hospital-based EP no longer includes EPs in outpatient settings. CMS notes in the Meaningful Use Final Rule: The above sections indicate that the determination of whether an EP is a hospital-based EP shall be made on the basis of the site of service, as defined by the Secretary, and without regard to any employment or billing arrangement between the EP and any other provider. For example, the hospitalbased determination for an EP would not be affected by whether the EP is an employee of the hospital, under a contractual relationship with the hospital, or with respect to whether he or she has made a reassignment to the hospital for Part B billing purposes. CMS also finalizes its earlier proposal to consider the definition of substantially all as furnishing at least 90 percent of services in a hospital setting. Under the Meaningful Use Final Rule, a hospital-based EP will be one who provides more than 90 percent of his services classified under two places of service codes (21-inpatient hospital and 23-emergency room, hospital). Therefore, EPs in outpatient settings are now eligible for incentive payments. 7 However, hospital-based EPs practicing predominantly in a federally qualified health center or a rural health center will still be eligible for Medicaid incentive payments. -10-
11 Addition of Critical Access Hospitals to the Definition of Acute Care Hospitals for Purposes of the Medicaid Incentive Program In the Meaningful Use Proposed Rule, CMS proposed to define an acute care hospital as a health care facility where the average length of patient stay is 25 days or fewer with a CMS Certification Number (CCN) that has the last four digits in the series 0001 through 0879 (i.e., short-term general hospitals and 11 U.S. cancer hospitals). CMS states that it received numerous comments recommending that critical access hospitals (CAHs) be included in the definition of acute care hospital. Because CAHs meet the proposed definition except for the CCN range, and CMS believes that CAHs would benefit from being able to electronically communicate with hospitals, CMS is finalizing a definition of acute care hospitals that will include CAHs. The new definition for acute care hospitals will be those hospitals with an average patient length of stay of 25 days or fewer, and with a CCN that falls in the range or CERTIFICATION CRITERIA FINAL RULE The Certification Criteria Final Rule completes the adoption of the initial set of standards, implementation specifications and certification criteria for the final Stage 1 meaningful use objectives and measures. The final adopted certification criteria, standards and implementation specifications establish the required capabilities that EHR systems will need to satisfy, at a minimum, in order for EPs and eligible hospitals to qualify for incentive payments under the Medicare and Medicaid Incentive EHR Programs. EHR technology Complete EHRs and EHR Modules will be tested and certified by ONC-Authorized Testing and Certification Bodies (ONC-ATCBs), in accordance with these certification criteria to ensure that such EHRs comply with the adopted criteria, standards and specifications. 8 Key Terms In the Meaningful Use Final Rule, CMS deferred to ONC for its definitions of Qualified EHR, Complete EHR, EHR Module and Certified EHR Technology. Based in part on public comments on the Certification Criteria Interim Final Rule, ONC makes a few changes to clarify and finalize these key terms. Qualified EHR : An electronic record of health-related information on an individual that (1) includes patient demographic and clinical health information, such as medical history and problem lists; and (2) has the capacity: (i) to provide clinical decision support; (ii) to support physician order entry; (iii) to capture and query information relevant to health care quality; and (iv) to exchange electronic health information with, and integrate such information from other sources. Complete EHR : EHR technology that has been developed to meet, at a minimum, all applicable certification criteria adopted by the Secretary. ONC clarifies that the definition of a Complete EHR does not preclude any additional capabilities from being included as part of the Complete EHR, so long as the EHR meets all the applicable certification criteria. 8 ONC finalized the Temporary Certification Program for Health Information Technology that establishes the process whereby the agency will designate ONC-ATCBs to test and certify complete EHRs and EHR Modules to ensure that EPs and eligible hospitals are using certified EHR technology for purposes of the Medicare and Medicaid EHR Incentive Programs. See 75 Fed. Reg (June 24, 2010). -11-
12 EHR Module : Any service, component or combination thereof that can meet the requirements of at least once certification criterion adopted by the Secretary. Certified EHR Technology : (1) A Complete EHR that meets the requirements included in the definition of a Qualified EHR and has been tested and certified in accordance with the certification program established by the National Coordinator as having met all applicable certification criteria adopted by the Secretary; or (2) a combination of EHR Modules in which each constituent EHR Module of the combination has been tested and certified in accordance with the certification program established by the National Coordinator as having met all applicable certification criteria adopted by the Secretary, and the resultant combination also meets the requirements included in the definition of a Qualified EHR. Increased Flexibility and Innovation In the Certification Criteria Final Rule, ONC acknowledges the need for greater flexibility with respect to the certification criteria, standards and implementation specifications to ensure the adoption of EHR systems and to accommodate new developments in health information technology. ONC identifies the following four methods for incorporating greater flexibility into the Certification Criteria Final Rule and future rulemakings. Alternative Standards As set forth in the Certification Criteria Interim Final Rule, ONC adopts alternative standards (and applicable implementation specifications) for several certification criteria. If an adopted certification criterion refers to more than one standard as alternatives, use of at least one of the alternative standards will be considered compliance with the certification criterion. For example, with respect to patient summary records, ONC adopts the Continuity of Care Document (CCD) and Continuity of Care Record (CCR) standards as alternatives. Minimum Code Set Standards ONC finalizes several minimum code set standards, which set the floor for testing and certification. With respect to minimum code set standards, ONC makes clear that if, and when, the Secretary adopts a newer version of an adopted minimum code set, the Secretary will raise the bar for what is permitted for testing and certification without affecting the certification status of the Certified EHR Technology. ONC identifies and deems acceptable newer versions of the following adopted minimum standard code sets LOINC version 2.3, February 26, 2010, and CVX Vaccines Administered, March 17, Optional Standards, Implementation Specifications and Certification Criteria In the Certification Criteria Final Rule, ONC adopts optional standards, implementation specifications and certification criteria to help better prepare the health information technology industry for future mandatory certification requirements. The optional standards, implementation specifications and certification criteria would be voluntary and not required for testing and certifying a Complete EHR or EHR Module. -12-
13 Standards and Backwards Compatibility ONC is considering an approach referred to as backwards compatibility to improve flexibility in its requirements. Under this approach, a newer version of a standard would be backward compatible with a previous adopted standard, such that EPs and eligible hospitals could continue to use the older version until the newer version of the standard was fully adopted. ONC foresees the possibility of adopting a backwards compatible version of a previously adopted standard and allowing entities to voluntarily use the newer version for a period of time. ONC notes that given the adoption of new or modified standards, implementation specifications and certification criteria every two years in coordination with the initiation of a new stage of meaningful use, the adoption of backwards compatible versions of standards would generally be limited to intermediate years (i.e., 2012 and 2014). Transport Standards In the Certification Criteria Interim Final Rule, ONC proposes Simple Object Access Protocol (SOAP) version 1.2 and Representational State Transfer (REST) as standard ways for systems to interact with each other. Given the concerns raised during the comment period on the burden associated with adopting these standards, ONC decides it is best not to adopt these standards at this time. However, ONC encourages developers of EHR systems to utilize transport standards that will allow the industry to find common methods for electronic health information exchange. ONC intends to return to its decision in future rulemakings. Adopted Certification Criteria The certification criteria encompass the minimum capabilities necessary to satisfy both the core and menu set of meaningful use measures and objectives discussed above. In the Certification Criteria Final Rule, ONC adopts the following certification criteria: General Certification Criteria for Complete EHRs or EHR Modules Drug-Drug, Drug-Allergy Interaction Checks Drug-Formulary Checks Maintain Up-to-Date Problem List Maintain Active Medication List Maintain Active Medication Allergy List Record and Chart Vital Signs Smoking Status Incorporate Laboratory Test Results Generate Patient Lists Medication Reconciliation Submission to Immunization Registries Public Health Surveillance Patient-Specific Education Resources Automated Measure Calculation Access Control Emergency Access Automatic Log-Off Audit Log Integrity Authentication General Encryption Encryption When Exchanging Electronic Health Information -13-
14 Specific Certification Criteria for Complete EHRs or EHR Modules Designed for EPs CPOE Electronic Prescribing Record Demographics Patient Reminders Clinical Decision Support Electronic Copy of Health Information Timely Access Clinical Summaries Exchange Clinical Information and Patient Summary Record Calculate and Submit Clinical Quality Measures Specific Certification Criteria for Complete EHRs or EHR Modules Designed for an Inpatient Setting CPOE Record Demographics Clinical Decision Support Electronic Copy of Health Information Electronic Copy of Discharge Instructions Exchange Clinical Information and Patient Summary Record Reportable Lab Results Advance Directives Calculate and Submit Clinical Quality Measures -14-
15 If you would like to receive future Health Care Advisories electronically, please forward your contact information including address to Be sure to put subscribe in the subject line. For further guidance please contact one of the attorneys or advisors listed below: Alston & Bird Health Information Technology (HIT) Task Force ATLANTA One Atlantic Center 1201 West Peachtree Street Atlanta, GA Angela T. Burnette Jennifer L. Butler Martin J. Elgison Laura E. Holland Robert C. Jones Peter M. Kazon David C. Keating Robert C. Lower D Andrea J. Morning Colin T. Roskey Tiffani V. Williams Marilyn Yager Senior Public Policy Advisor CHARLOTTE Bank of America Plaza Suite South Tryon Street Charlotte, NC DALLAS Chase Tower Suite Ross Avenue Dallas, TX LOS ANGELES 333 South Hope Street 16th Floor Los Angeles, CA NEW YORK 90 Park Avenue New York, NY RESEARCH TRIANGLE Suite Beechleaf Court Raleigh, NC SILICON VALLEY 275 Middlefield Road Suite 150 Menlo Park, CA VENTURA COUNTY Suite Townsgate Road Westlake Village, CA WASHINGTON, D.C. The Atlantic Building 950 F Street, NW Washington, DC Alston & Bird llp 2010
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